Urmila Devi vs Branch Manager, National … on 30 January, 2020


Supreme Court of India

Urmila Devi vs Branch Manager, National … on 30 January, 2020

Author: Hon’Ble The Justice

Bench: Hon’Ble The Justice, B.R. Gavai, Surya Kant

                                                       1


                                                                        REPORTABLE

                                     IN THE SUPREME COURT OF INDIA
                                     CIVIL APPELLATE JURISDICTION

                                    CIVIL APPEAL No.       838    OF 2020
                                  (Arising out of SLP(C) No. 12230 of 2016)

                         URMILA DEVI & ORS.                         ...APPELLANT(S)

                                                   VERSUS


                         BRANCH MANAGER, NATIONAL INSURANCE
                         COMPANY LTD. & ANR.            .... RESPONDENT(S)


                                               JUDGMENT

1. Leave granted.

2. Heard the learned counsels for the parties.

3. The present appeal challenges the judgment and order

dated 21.01.2016 passed by the learned single judge of the

High Court of Patna in Miscellaneous Appeal No.521 of 2011

thereby, holding the cross­objection of the claimant to be not

maintainable.

Signature Not Verified

Digitally signed by
CHARANJEET KAUR
Date: 2020.01.30
17:13:56 IST
Reason:

2

4. The facts, bare necessary, for decision of the present

appeal, are as under:

5. On 2.5.2008, Sanjay Tanti, husband of appellant No.1;

father of appellant Nos. 2 to 4 and son of appellant No.5 met

with an accident while he was travelling from Ladma to

Goradih by a Tata Maxi. The appellants filed a Claim

Petition under Section 166 of the Motor Vehicles Act, 1988

(hereinafter referred to as “the M.V. Act”). The owner of the

vehicle was joined as Opponent No.1; the driver of the vehicle

was joined as Opponent No.2 whereas, the National

Insurance Company Limited (hereinafter referred to as “the

Insurance Company”) were joined as Opponent Nos. 3 and 4.

6. The claim of the Insurance Company was that the driver

and owner of the vehicle had breached the terms and

conditions of the insurance policy and, as such, they are not

liable for payment of compensation.

7. The Motor Vehicle Accidental Claim Tribunal

(hereinafter referred to as “the Tribunal”) vide judgment and

order dated 29.1.2011, rejected the contention of the
3

Insurance Company that the driver and owner of the vehicle

had breached the terms and conditions and while allowing

the Claim Petition directed the Insurance Company to pay

compensation of Rs.2,47,500/­ to the claimants in terms of

the order dated 29.1.2011.

8. Being aggrieved by the judgment and award passed by

the learned Tribunal, the Insurance Company preferred Misc.

Appeal No.521 of 2011 before the High Court at Patna

contending therein, that the learned Tribunal had

erroneously fastened the liability on it. In the said appeal, a

cross­objection came to be filed by the appellants herein.

When the appeal came up for hearing, it was noticed that the

appeal was dismissed for want of office objections and the

counsel for the appellants therein (Insurance Company)

stated that the appellants (Insurance Company) were not

interested in reviving the appeal. The appeal was, as such,

disposed of by the High Court. Insofar as the cross­objection

of the appellants herein (the claimants) is concerned, the

High Court vide the impugned judgment and order dated
4

21.01.2016 held, that when the appeal filed by the Insurance

Company is only restricted to denial of its liability to make

the payment of compensation then in such case the cross­

objection at the behest of the claimants in the shape of

appeal would not be tenable. It, however, held that if the

Insurance Company in the appeal challenges the quantum of

compensation, in such a case, the claimant(s) will have a

right to file an objection in terms of Order XLI rule 22 of the

Code of Civil Procedure, 1908 (hereinafter referred to as

“CPC”) and, as such, dismissed the cross­objection as not

maintainable.

9. The High Court of Patna in view of Rule 249 of the Bihar

Motor Vehicles Rules, 1992 has held, that there is no

impediment for the claimant(s) to file cross­objection in an

appeal filed by the Insurance Company if the Insurance

Company had challenged the quantum of compensation

awarded to the claimant. It, however, held that if the appeal

filed by the Insurance Company is restricted only to its
5

liability to make the payment of compensation on the ground

of breach of terms and conditions of the insurance policy by

the vehicle owner and/or driver of the vehicle, then the cross­

objection filed by the claimant would not be tenable. It has

been held, that in such a case the claimant(s) will have a

right to file an appeal as provided under Section 173 of the

M.V. Act.

10. Being aggrieved, the appellants are before us by way of

present appeal by special leave.

11. The learned counsel appearing on behalf of the

appellants submit that the High Court has totally erred in

holding that the cross­objection filed by the claimants was

not maintainable since the appellant ­ Insurance Company

has not challenged the quantum of compensation.

12. Per contra, the learned counsel for the Insurance

Company submit, that the High Court has rightly rejected the

cross­objection of the appellants herein. It is submitted that

since the Insurance Company had not pressed the appeal,

the cross­objection was rightly rejected by the High Court.

6

13. The provisions of Section 173 of the M.V. Act and Order

XLI rule 22 of the CPC, relevant for the present appeal, read

thus:

Section 173 of the M.V. Act.

“173. Appeals. ­ (1) Subject to the provisions of
sub­section (2) any person aggrieved by an award
of a Claims Tribunal may, within ninety days
from the date of the award, prefer an appeal to
the High Court:

Provided that no appeal by the person who is
required to pay any amount in terms of such
award shall be entertained by the High Court
unless he has deposited with it twenty­five
thousand rupees or fifty percent of the amount so
awarded, whichever is less, in the manner
directed by the High Court:

Provided further that the High Court may
entertain the appeal after the expiry of the said
period of ninety days, if it is satisfied that the
appellant was prevented by sufficient cause from
preferring the appeal in time.

(2) No appeal shall lie against any award of a
Claims Tribunal if the amount in dispute in the
appeal is less than ten thousand rupees.”

Order XLI rule 22 of the CPC

“22. Upon hearing respondent may object to
decree as if he had preferred separate appeal.—
7

(1) Any respondent, though he may not have
appealed from any part of the decree, may not only
support the decree but may also state that the
finding against him in the Court below in respect
of any issue ought to have been in his favour; and
may also take any cross­objection to the decree
which he could have taken by way of appeal,
provided he has filed such objection in the
Appellate Court within one month from the date of
service on him or his pleader of notice of the day
fixed for hearing the appeal, or within such further
time as the Appellate Court may see fit to allow.
Explanation.—A respondent aggrieved by a
finding of the Court in the judgment on which the
decree appealed against is based may, under this
rule, file cross­objection in respect of the decree in
so far as it is based on that finding,
notwithstanding that by reason of the decision of
the Court on any other finding which is sufficient
for the decision of the suit, the decree, is, wholly or
in part, in favour of that respondent.
(2) Form of objection and provisions
applicable thereto.—Such cross­objection shall
be in the form of a memorandum, and the
provisions of Rule 1, so far as they relate to the
form and contents of the memorandum of appeal,
shall apply thereto.

(3) * * *
(4) Where, in any case in which any respondent
has under this rule filed a memorandum of
objection, the original appeal is withdrawn or is
dismissed for default, the objection so filed may
nevertheless be heard and determined after such
notice to the other parties as the Court thinks fit.

8

(5) The provisions relating to appeals by
indigent persons shall, so far as they can be made
applicable, apply to an objection under this rule.”

14. Rule 249 of the Bihar Motor Vehicle Rules, 1992 reads

thus:

“249. Manner of appeals. ­ (1) Every appeal
against the Claims Tribunal shall be preferred in
the form of a memorandum signed by the
appellant or an advocate or attorney of the High
Court duly authorised in that behalf by the
applicant and presented to the High Court or to
such officer as it appoints in this behalf. The
memorandum shall be accompanied by a copy of
the award.

(2) The memorandum shall set forth concisely
and under district heads the grounds of objection
to the award against which the appeal is
preferred without any argument or narrative and
such grounds shall be numbered consecutively.

(3) Save as provided in sub­rules (1) and (2), the
provisions of Order XLI and Order XXI in First
Schedule to the Code of Civil Procedure, 1908 (V
of 1908) shall mutatis mutandis apply to appeals
preferred to the High Court under Section 173.”

15. In view of the aforesaid provision, the High Court has

rightly come to a conclusion that the claimants would be

entitled to file a cross­objection. However, it has restricted
9

the right of the claimants to file cross­objection only when an

appeal is filed by the Insurance Company challenging

quantum of compensation by placing reliance on previous

judgments of Patna High Court. It has been held, that when

the Insurance Company has not challenged the quantum of

compensation but only challenges its liability to pay

compensation on the ground that there is a breach of terms

and condition by the driver and/or the owner of the vehicle,

the cross­objection would not be tenable at the instance of

the claimants.

16. An issue arose before the learned Three­Judge Bench of

this Court in the case of Municipal Corporation of Delhi &

Ors. vs. International Security & Intelligence Agency

Limited1, as to whether in an appeal under Section 39 of the

Arbitration Act, 1940, a respondent has a right to file cross­

objection and, if so, whether the cross­objection must be

heard and decided on merits though the appeal by reference

1 (2004) 3 SCC 250
10

to which cross­objection has been filed is itself dismissed as

not maintainable.

17. This Court in the said judgment observed thus:

“14. Right of appeal is creature of statute.

There is no inherent right of appeal. No
appeal can be filed, heard or determined on
merits unless the statute confers right on
the appellant and power on the court to do
so. Section 39 of the Act confers right to file
appeal, insofar as the orders passed under
this Act are concerned, only against such of
the orders as fall within one or other of the
descriptions given in clauses (i) to (vi) of
sub­section (1) of Section 39. Parliament
has taken care to specifically exclude any
other appeal being filed, against any order
passed under the Act but not covered by
clauses (i) to (vi) abovesaid, by inserting the
expression “and from no others” in the text
of sub­section (1). Clause (a) of Section 41
extends applicability of all the provisions
contained in the Code of Civil Procedure,
1908 to (i) all proceedings before the court
under the Act, and (ii) to all the appeals,
under the Act. However, the applicability of
such of the provisions of the Code of Civil
Procedure shall be excluded as may be
inconsistent with the provisions of the Act
and/or of rules made thereunder. A bare
reading of these provisions shows that in all
the appeals filed under Section 39, the
provisions of the Code of Civil Procedure,
1908 would be applicable. This would
include the applicability of Order 41
including the right to take any cross­
11

objection under Rule 22 thereof to appeals
under Section 39 of the Act.

15. Right to prefer cross­objection partakes
of the right to prefer an appeal. When the
impugned decree or order is partly in favour
of one party and partly in favour of the
other, one party may rest contented by his
partial success with a view to giving a
quietus to the litigation. However, he may
like to exercise his right of appeal if he finds
that the other party was not interested in
burying the hatchet and proposed to keep
the lis alive by pursuing the same before the
appellate forum. He too may in such
circumstances exercise his right to file
appeal by taking cross­objection. Thus
taking any cross­objection to the decree or
order impugned is the exercise of right of
appeal though such right is exercised in the
form of taking cross­objection. The
substantive right is the right of appeal; the
form of cross­objection is a matter of
procedure.

16. Though the statement of law made
hereinabove flows simply by the reading of
the relevant statutory provisions yet some
available decisions may also be noticed.

In Bhadurmal v. Bizaatunnisa    Begum [AIR
1964 AP 365 : (1964) 1 An WR 290] a
Division   Bench     presided    over   by

Jaganmohan Reddy, J. (as His Lordship
then was) held cross­objection to be
maintainable in an appeal preferred under
Sections 47 to 49 of the Hyderabad
Jagirdars Debt Settlement Act, 1952
12

because the provisions of the Civil
Procedure Code were generally applicable by
virtue of Section 51 thereof. The
applicability of Order 41 Rule 22 to the
appeals under that Act was held not
excluded merely because provisions
governing grounds of appeal and court fees
were specifically enacted in the Hyderabad
Act
. In Inayatullah Khan v. Diwanchand
Mahajan
[AIR 1959 MP 58 : 1958 MP LJ
786] Chief Justice M. Hidayatullah (as His
Lordship then was) upheld maintainability
of the cross­objection in an election appeal
under Section 116­A of the Representation
of the People Act
, 1951 because the High
Court as an appellate court hearing an
appeal under Section 116­A was enjoined to
exercise the same powers, jurisdiction and
authority and to follow the same procedure
as it would have exercised or followed in
respect of a civil appeal under the Code of
Civil Procedure. In Ramasray
Singh v. Bibhisan Sinha
[AIR 1950 Cal 372]
the Division Bench consisting of Harries,
C.J. and Bachawat, J. (as His Lordship then
was) held that conferment of right of appeal
by Section 38 of the Bengal Money­Lenders
Act, 1940 which spoke of the order being
appealable in the same manner as if it were
a decree of the court implied a right in the
respondent to file cross­objection inasmuch
as the jurisdiction to hear appeal was
conferred on a pre­established civil court,
namely, the Court of the District Judge and
nothing was expressly stated as to the
procedure regulating such appeal. In A.L.A.

Alagappa Chettiar v. Chockalingam
13

Chetty [AIR 1919 Mad 784 : ILR 41 Mad 904
(FB)] a Full Bench of the High Court of
Madras presided over by Wallis, C.J. held
that right of the respondent to proceed by
way of memorandum of cross­objections
was strictly incidental to the filing of appeal
by opposite party and therefore in an appeal
under Sections 46 and 47 of the Provincial
Insolvency Act, 1907, cross­objections were
maintainable as the procedure prescribed in
the Civil Procedure Code is the standard
procedure and applicable to courts
exercising powers in insolvency cases.

17. With advantage, we may also refer to
observations of this Court made in Baru
Ram v. Prasanni
[AIR 1959 SC 93 : 1959
SCR 1403] . Section 116­A of the
Representation of the People Act
, 1951
contemplates an appeal being laid before
the Supreme Court from every order made
by the High Court under Section 98 or
Section 99 of that Act. Section 116­C
provides for every such appeal being heard
and determined by the Supreme Court as
nearly as may be in accordance with the
procedure applicable to the hearing and
determination of any appeal from any final
order passed by the High Court in exercise
of its original civil jurisdiction subject to the
provisions of that Act and the Rules, if any.
All the provisions of the Code of Civil
Procedure, 1908 and rules of the court
shall, so far as may be, apply in relation to
such appeal. P.B. Gajendragadkar, J. (as
His Lordship then was) speaking for the
Court observed: (AIR p. 99, para 11)
14

“There is no doubt that, in an ordinary
civil appeal, the respondent would be
entitled to support the decree under
appeal on grounds other than those
found by the trial court in his favour.
Order 41 Rule 22 of the Code of Civil
Procedure which permits the respondent
to file cross­objections recognize the
respondent’s right to support the decree
on any of the grounds decided against
him by the court below. In the present
case no appeal could have been preferred
by Respondent 1 because she had
succeeded in obtaining the declaration
that the appellant’s election was void and
it should therefore be open to her to
support the final conclusion of the High
Court by contending that the other
finding recorded by the High Court which
would go to the root of the matter is
erroneous. Prima facie there appears to
be some force in this contention;”
However, the Court did not express any final
opinion thereon as it was considered not
necessary to decide the point in that appeal.

18. We have, therefore, no doubt in our
mind that right to take a cross­objection is
the exercise of substantive right of appeal
conferred by a statute. Available grounds of
challenge against the judgment, decree or
order impugned remain the same whether it
is an appeal or a cross­objection. The
difference lies in the form and manner of
exercising the right; the terminus a quo (the
starting point) of limitation also differs.

15

19. In Superintending Engineer v. B. Subba
Reddy
[(1999) 4 SCC 423] a two­Judge
Bench of this Court observed (vide SCC p.
434, para 24):

“If there is no right of cross­objection
given under Section 39 of the Act, it
cannot be read into Section 41 of the Act.
Filing of cross­objection is not procedural
in nature. Section 41 of the Act merely
prescribes that the procedure of the Code
would be applicable to the appeal under
Section 39 of the Act. We are, therefore,
of the opinion that cross­objection by the
respondent was not maintainable….”

Such observation is not correct and
proceeds on certain wrong premises. Firstly,
form of cross­objection is procedural and is
only a manner of exercising right of appeal
which is substantive, as we have already
stated. Secondly, it is not merely the
procedure prescribed by the Code of Civil
Procedure which has been made applicable
to proceedings under the Arbitration Act by
Section 41(a) of the Act; the entire body of
the Code of Civil Procedure, 1908 has been
made applicable to all proceedings before
the court and to all appeals under the
Arbitration Act, 1940. The provision is
general and wide in its applicability which
cannot be curtailed; the only exception
being where the provisions of the Arbitration
Act
and/or of the rules made thereunder
may be inconsistent with the provisions of
the Code of Civil Procedure, 1908 in which
case the applicability of the latter shall
stand excluded but only to the extent of
16

inconsistency. We may hasten to add that to
the extent of our disagreement with the law
laid down in B. Subba Reddy case [(1999) 4
SCC 423] the proposition appears to have
been rather widely stated in that case. In
fact the question before the Court in B.
Subba Reddy case [(1999) 4 SCC 423] was
whether cross­objection seeking the relief of
award of interest at a higher rate was
maintainable though such an order did not
fall within the purview of Section 39(1) of
the Act.

20. Once we hold that by taking cross­
objection what is being exercised is the right
of appeal itself, it follows that the subject­
matter of cross­objection and the relief
sought therein must conform to the
requirement of Section 39(1). In other
words, a cross­objection can be preferred if
the applicant could have sought for the
same relief by filing an appeal in conformity
with the provisions of Section 39(1) of the
Act. If the subject­matter of the cross­
objection is to impugn such an order which
does not fall within the purview of any of the
categories contemplated by clauses (i) to (vi)
of sub­section (1) of Section 39 of the Act,
the cross­objection shall not be
maintainable.”

18. It, thus, could be seen, that this Court has held that the

right to prefer cross­objection partakes of the right to prefer

an appeal. It has been held, that when the impugned decree
17

or order is partly in favour of one party and partly in favour of

the other, one party may rest contented by his partial success

with a view to giving a quietus to the litigation. It, however,

held that if he finds that the other party was not interested in

giving an end to the litigation and proposed to keep the lis

alive by pursuing the same before the appellate forum, he

may like to exercise his right of appeal. It has been held, that

he too may in such cases and circumstances exercise his

right to file appeal by taking cross objection. It has been next

held, that taking any cross­objection to the decree or order

impugned is the exercise of right of appeal though such right

is exercised in the form of taking cross­objection. It has been

held, that the substantive right is the right of appeal and the

form of cross objection is a matter of procedure.

19. While arriving at the said decision, this Court relied on

the judgment in the case of Bhadurmal vs. Bizaatunnisa

Begum2, wherein an issue with regard to maintainability of

cross­objection in an appeal preferred under Sections 47 to

2 AIR 1964 AP 365
18

49 of Hyderabad Jagirdars Debt Settlement Act, 1952 was

considered. It also relied on the judgment in the case of

Inayatullah Khan vs. Diwanchand Mahajan3, wherein

maintainability of cross objection in an election appeal under

Section 116A of the Representation of the People Act, 1951

was upheld. It further relied on the judgment of the Calcutta

High Court in the case of Ramasray Singh & Ors. vs.

Bibhisan Sinha4, upholding the right of the respondent to

file cross­objection in an appeal contemplated under Section

38 of Bengal Money­Lenders Act, 1940.

20. It further relied on certain observations of this Court in

the case of Baru Ram vs. Prasanni5. This Court did not

agree with the contrary view taken by the learned two­judge

Bench of this Court in the case of Superintending Engineer

& Ors. vs. B. Subba Reddy6. However, holding so, this

Court held that since the right to appeal under Section 39 of

the Arbitration Act, 1940 was only restricted to clauses (i) to
3 AIR 1959 MP 58
4 AIR 1950 Cal 372
5 AIR 1959 SC 93 : 1959 SCR 1403
6 (1999) 4 SCC 423
19

(vi) of sub­section (1) thereof, the cross­objection also must

conform to the said requirement. In other words, it was held

that a cross­objection would be maintainable only if the

subject­matter thereof falls in any of the category carved out

under clauses (i) to (vi) of sub­section (1) of Section 39 of the

Arbitration Act, 1940.

21. This Court further found that the entire Order XLI rule

22 CPC would apply to a cross­objection including the

provisions of sub­rule (4) thereof. It was held, that if the

original appeal is found to be incompetent or not

maintainable if it is filed against an order not falling under

any of the clauses (i) to (vi) of sub­Section (1) of Section 39,

then the cross objection shall also fail on that ground and

cannot be adjudicated upon on merits. It could, thus, be

seen that the view taken by the Court is that the cross­

objection would be tenable only if appeal is validly tenable.

22. A perusal of Section 173 of the M.V. Act would reveal

that the said provision does not restrict the right to file an

appeal as is restricted under Section 39 of the Arbitration
20

Act, 1940. It provides, that any person aggrieved by an

award of a Claims Tribunal, subject to the provisions of sub­

section (2) thereof, may prefer an appeal to the High Court.

The restriction imposed under sub­section (2) of Section 173

is with regard to non­filing of appeal against any award of a

Claims Tribunal if the amount in dispute in the appeal is less

than ten thousand rupees. Needless to mention that this is

subject to the provisions about limitation.

23. As already discussed herein above, the learned single

judge of the High Court himself has observed that in view of

Rule 249 of the Bihar Motor Vehicle Rules, 1992, there

cannot be any issue with regard to the tenability of the cross­

objection. Sub­rule (3) of Rule 249 of the Bihar Motor Vehicle

Rules, 1992 would show, that save as provided in sub­rules

(1) and (2), the provisions of Order XLI and Order XXI in

First Schedule to the CPC shall apply mutatis mutandis to

appeals preferred to the High Court under Section 173 of the

M.V. Act.

21

24. A conjoint reading of the provisions of Section 173 of the

M.V. Act; Rule 249 of the Bihar Motor Vehicle Rules, 1992;

and Order XLI rule 22 of the CPC would reveal, that there is

no restriction on the right to appeal of any of the parties. It is

clear, that any party aggrieved by any part of the Award

would be entitled to prefer an appeal. It is also clear, that

any respondent, though he may not have appealed from any

part of the decree, apart from supporting the finding in his

favour, is also entitled to take any cross­objection to the

decree which he could have taken by way of appeal.

25. When in an appeal the appellant could have raised any

of the grounds against which he is aggrieved, we fail to

understand, as to how a respondent can be denied to file

cross­objection in an appeal filed by the other side

challenging that part of the Award with which he was

aggrieved. We find, that the said distinction as sought to be

drawn by the High Court is not in tune with conjoint reading

of the provisions of Section 173 of the M.V. Act; Rule 249 of
22

the Bihar Motor Vehicle Rules, 1992; and Order XLI rule 22

of the CPC.

26. As a matter of fact, it could be seen from the prayer

clause in the appeal preferred by the respondents herein

(Insurance Company) before the High Court that the entire

award was challenged by the respondents – Insurance

Company. Not only that, but the appellants herein (the

claimants) were also impleaded as party respondents to the

said appeal. In such circumstances, the High Court has

erred in declining to consider the cross­objection of the

appellants herein (the claimants) on merits.

27. There is another angle to it. Sub­rule (4) of Rule 22 of

Order XLI of the CPC specifically provides, that even if the

original appeal is withdrawn or is dismissed for default, the

cross­objection would nevertheless be heard and determined

after such notice to the other parties as the Court thinks fit.

We are, therefore, of the considered view, that even if the

appeal of the Insurance Company was dismissed in default
23

and the Insurance Company had submitted that they were

not interested to revive the appeal, still the High Court was

required to decide the cross­objection of the appellants herein

on merits and in accordance with law.

28. In the result, the appeal is allowed. The impugned

judgment and order dated 21.1.2016 holding that the cross­

objection of the present appellants was not maintainable is

quashed and set aside. The matter is remitted back to the

High Court for deciding the cross­objection filed by the

present appellants on its own merits. There shall be no order

as to costs.

…………………..CJI.

[S.A. BOBDE]

………………….J.

[B.R. GAVAI]

………………….J.

[SURYA KANT]

NEW DELHI;

JANUARY 30, 2020



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